When mortgage rates fall, more prospective buyers can afford to buy a home.
Home loan rates constantly fluctuate in response to economic data, market expectations, geopolitical events and changes to monetary policy. Mortgage rates also vary significantly from lender to lender, and the one you qualify for will depend on things like your credit score, income and loan type.
Whether you need a mortgage now or are planning to buy in the future, comparing multiple loan offers from different lenders is one of the best ways to get a lower interest rate.
Read more: Weekly Mortgage Predictions
Current mortgage and refinance rates
What are today’s mortgage rates?
| Product | Interest rate | APR |
|---|---|---|
| 5/1 ARM jumbo | 5.80% | 6.82% |
| 30-year fixed-rate FHA | 6.28% | 6.33% |
| 5/1 ARM | 5.85% | 7.03% |
| 30-year fixed-rate VA | 6.46% | 6.50% |
| 7/1 ARM jumbo | 5.77% | 6.79% |
| 15-year fixed-rate jumbo | 5.85% | 5.92% |
| 20-year fixed-rate | 6.17% | 6.22% |
| 30-year fixed-rate | 6.29% | 6.34% |
| 7/1 ARM | 6.36% | 7.13% |
| 30-year fixed-rate jumbo | 6.39% | 6.44% |
| 10/1 ARM | 6.89% | 7.18% |
| 15-year fixed-rate | 5.59% | 5.67% |
| 7/1 ARM refinance | 6.34% | 6.90% |
| 30-year fixed-rate refinance | 6.34% | 6.38% |
| 7/1 ARM jumbo refinance | 5.68% | 6.75% |
| 15-year fixed-rate refinance | 5.70% | 5.78% |
| 20-year fixed-rate refinance | 6.23% | 6.28% |
| 30-year fixed-rate jumbo refinance | 6.30% | 6.35% |
| 30-year fixed-rate FHA refinance | 6.41% | 6.45% |
| 10/1 ARM refinance | 6.97% | 7.21% |
| 30-year fixed-rate VA refinance | 7.15% | 7.18% |
| 5/1 ARM jumbo refinance | 5.80% | 6.82% |
| 5/1 ARM refinance | 5.80% | 6.85% |
| 15-year fixed-rate jumbo refinance | 5.87% | 5.94% |
Updated on September 15, 2024.
We use information collected by Bankrate, which is owned by the same parent company as CNET, to track daily mortgage rate trends. The above table summarizes the average rates offered by lenders across the country.
Recent mortgage rate news
New economic data, geopolitical risks and monetary policy adjustments by the Federal Reserve all affect the percentage of interest charged on a home loan.
Throughout the first half of 2024, average mortgage rates were around 7%.
In early August, a weaker labor report triggered recession fears among investors. In just a few days, the average rate on a 30-year fixed mortgage fell to 6.5%, its lowest level since May 2023. Typically, bad economic news results in lower mortgage rates.
Inflation also impacts mortgage rates. Recent figures show annual price growth falling below 3% for the first time since spring 2021. According to Melissa Cohn, regional vice president at William Raveis Mortgage and member of CNET Money’s expert review board, cooler inflation and a slowing economy will translate to lower interest rates on home loans.
Are mortgage rates going down this year?
It’s difficult to predict exactly where mortgage rates will go. The reaction to July’s labor reading is a perfect example. Most economists didn’t forecast mortgage rates reaching 6.5% until the end of 2024. But that happened in the span of just a few days.
Barring a severe economic downturn, which economists don’t currently predict, it’s unlikely mortgage rates will continue to fall at such a fast pace. However, an incoming Fed rate cut still bodes well for homebuyers.
As the Fed begins lowering rates, it should lead to a gradual decline in mortgage rates over the coming months. Recent labor may also give the Fed a reason to lower rates more aggressively than previously expected this year: two or three cuts as opposed to just one.
“If inflation continues to moderate and unemployment goes up, the Fed has an opportunity to cut one time before the election and potentially again in December,” said Jeb Smith, a real estate agent and a member of CNET Money’s ERB.
It’s possible that average mortgage rates will move closer to 6% by the end of the year, though it will continue to depend on economic data and the Fed’s actions.
How to get the best mortgage rate
You can’t control the broader macroeconomic factors driving mortgage rates, but there are some ways to get a lower personal rate. Even a difference of a few tenths of a percentage point can shave off thousands of dollars from what you’ll pay over the course of your home loan.
- Build your credit score: A higher credit score can help you qualify for a lower interest rate. Aim to pay bills on time, and keep your credit card balances below 30% of your credit limit. Check your credit report regularly for errors.
- Save for a bigger down payment: A larger down payment lowers the loan amount you need to borrow, making you less risky to the lender, which could help you become eligible for a lower interest rate.
- Consider a shorter-term loan: Shorter home loan terms (like a 15-year or 10-year mortgage) typically come with lower interest rates than longer-term loans (like 30-year mortgages). However, the monthly payments will be higher.
- Shop around for mortgage lenders: Compare rates, terms and loan estimates from at least three different mortgage lenders. If one lender offers you a lower interest rate and another offers a better deal on closing costs, you can use that to negotiate.
What to know about mortgages
Your mortgage rate is the percentage of interest a lender charges for providing the loan you need to buy a home. Multiple factors determine the rate you’re offered. Some are specific to you and your financial situation, and others are influenced by macro market conditions, such as inflation, the Fed’s monetary policy and the overall demand for loans.
While the broader economy plays a key role in mortgage rates, some key factors under your control affect your rate:
- Your credit score:Lenders offer the lowest available rates to borrowers withexcellent credit scoresof 740 and above. Because lower credit scores are deemed riskier, lenders charge higher interest rates to compensate.
- The size of your loan:Thesize of your loancan impact the interest rate you qualify for.
- The loan term:The most common mortgage is a30-year fixed-rate loan, which spreads your payments over three decades. Shorter loans, such as15-year mortgages, typically have lower rates but larger monthly payments.
- The loan type:The type of mortgage you choose impacts your interest rate. Some loans have a fixed rate for the entire life of the loan. Others have anadjustable ratethat have lower rates at the start of the loan but could result in higher payments down the road.
The annual percentage rate, or APR, is usually higher than your loan’s interest rate and represents the true cost of your loan. It includes the interest rate and other costs such as lender fees or prepaid points. So, while you might be tempted with an offer for “interest rates as low as 6.5%,” look at the APR instead to see how much you’re really paying.
Mostmortgage loans are based on an amortization schedule: You’ll pay the same amounteach month for the life of the loan, but the generated interest will be highest at the beginning and will taper as the principal (the amount you borrowed) decreases. Your amortization schedule will show how much of your monthly payment goes to interest and how much pays down the principal. Most borrowers find a fixed, predictable monthly payment more convenient.
Pros and cons of getting a mortgage
Pros
You’ll build equity in the property instead of paying rent with no ownership stake.
You’ll build your credit by making on-time payments.
You’ll be able to deduct the interest on the mortgage on your annual tax bill.
Cons
You’ll take on a sizable chunk of debt.
You’ll pay more than the list price -- potentially a lot more over the course of a 30-year loan --due to interest charges.
You’ll have to budget for closing costs to close the mortgage, which add up to tens of thousands of dollars in some states.
Mortgage lenders often publish their rates for different mortgage types, which can help you research and narrow down where you’ll apply for preapproval. But an advertised rate isn’t always the rate you’ll get. When shopping for a new mortgage, it’s important to compare not just mortgage rates but also closing costs and any other fees associated with the loan. Experts recommend shopping around and reaching out to multiple lenders for quotes and not rushing the process.
How to refinance your mortgage
When you refinance your mortgage, you swap out your current home loan for a new one, ideally with better terms.
Determine whether you want to do a cash-out refinance or a rate-and-term refinance. With a cash-out refinance, you take out a new mortgage that’s bigger than your existing one and pocket the difference as cash. With a basic rate-and-term refinance, you take out a loan the same size as your existing mortgage, just with a new interest rate and/or loan term.
The refinancing process will feel the same as securing your existing mortgage. You’ll need to choose a lender, apply for the loan, wait for the underwriting process to conclude, have your home appraised and close on your new loan. Just like with your original mortgage, you’ll need to pay another set of closing costs when you refinance.
FAQs
Most conventional loans require a credit score of 620 or higher, but Federal Housing Administration and other loan types may accommodate borrowers with scores as low as 500, depending on the lender.
Your credit score isn’t the only factor that impacts your mortgage rate. Lenders will also look at your debt-to-income ratio to assess your level of risk based on the other debts you’re paying back such as student loans, car payments and credit cards. Additionally, your loan-to-value ratio plays a key role in your mortgage rate.
A rate lock means your interest rate won’t change between the offer and the time you close on the house. For example, if you lock in a rate at 6.5% today and your lender’s rates climb to 7.25% over the next 30 days, you’ll get the lower rate. A common rate-lock period is 45 days, so you’re still on a tight timeline. Be sure to ask lenders about rate lock windows and the cost to secure your rate.
Mortgage rates are always changing, and it’s impossible to predict the market. However, most experts think mortgage rates will gradually decline over the course of 2024. Fannie Mae predicts the average rate for a 30-year fixed mortgage will end the year at 6.7%.
